Six-month extension to the UK’s exit date (to 31st Oct) confirmed but little reaction in Sterling exchange rates!
Yesterday’s press conference at the EU emergency summit brought a six-month extension to the UK’s exit date (to 31st Oct), with a review on progress in June. Commission President Junker played down the importance of this review, stating that it was “not another cliff edge”. Sterling’s reaction was muted as markets look for more substantial updates that progress is been made with Brexit.
It’s a light data day, following the busy one yesterday. Clearly the market will continue to digest the implications of the UK’s extension. The PM is expected to make a statement to the House of Commons on yesterday’s summit.
To later this afternoon and the US. The March reading of US PPI will be the only release of note later today. Final readings of European CPI data, out earlier this morning, generated little reaction, unsurprising given they were so soon after yesterday’s ECB meeting. In yesterday’s meeting, the ECB reaffirmed that inflation rates remain significantly below 2%. Refreshed IMF forecasts released earlier this week suggested that inflation in the major Euro zone economies will remain below-target for some time.
Elsewhere, there are a number of Fed speakers. Perhaps most interesting will be arch-doves Kashkari and Bullard. While their long-held calls for no further tightening are well understood, they also appear to be reluctant to call for cuts. We will watch to see whether such messaging continues.